Indian gov’t hits streets for foreign supermarkets

NEW DELHI - Reuters

Supporters of India’s ruling Congress party hold posters of political leaders during a public rally to support the foreign retail chains in New Delhi. REUTERS photo

India’s ruling Congress party, led by Sonia Gandhi, sought to drum up support for the contentious opening up of the country’s vast retail sector to big foreign chains at a mass rally yesterday, saying supermarkets would help farmers and consumers battling high inflation.

The left leaning Gandhi’s new support for reforms is seen as a shift in strategy by Prime Minister Manmohan Singh’s government, which is trying to win over a population angry at corruption scandals as it heads into a string of elections including a northern state assembly on Sunday.

 “FDI in retail will not only benefit farmers but also unemployed youth and the common man,” the Italian-born head of the ruling Congress party told a capacity crowd of mainly rural supporters in New Delhi’s Ramlila Maidan ground, which holds about 50,000 people. More stood outside.

A lack of cold storage and quality granaries means up to a third of India’s food production goes to waste. The government says supermarket chains such as Walmart will build the infrastructure required to unblock supply bottlenecks and bring down prices.

Critics including the leading opposition Bharatiya Janata Party say foreign supermarkets will destroy millions of jobs in small shops and will lead to lower prices for farmers in the long term.

In October, Nobel Prize-winning economist Joseph Stiglitz told an Indian newspaper that foreign supermarket investment would not benefit India and could cost manufacturing jobs if the retailers sourced from China.

Gandhi, who heads a dynasty that predates India’s independence from Britain in 1947 and who is seen as the country’s most powerful politician, last week promoted the new retail policy with apple farmers in Himachal Pradesh before weekend’s election in the mountainous state.

Her son Rahul Gandhi, expected to head the party’s campaign for a 2014 general election, also defended the policy at the rally. The crowd, many wearing pink turbans and carrying placards in favor of foreign investment, were mainly men and women from the north Indian farming states of Rajasthan, Haryana and Uttar Pradesh.

 “We support the government’s decision on FDI. The opposition is only confusing the people,” said Laxmi Devi, from the poor state of Bihar.